Enterprises waste 28% of software budgets on unwanted vendor upgrades
A survey of 2,018 senior IT leaders at large US and UK firms found that 28% of software budgets fund unwanted vendor-driven changes. Ninety-five percent reported paying for upgrades that reduced value, with the latest costing $12.87 million. These forced migrations also led to early hardware retirement and diverted engineering resources, highlighting a significant "software tax" on enterprise efficiency.
Key points
- Origina, a software support provider, commissioned a survey of 2,018 senior IT decision-makers at US and UK companies with over $1 billion in revenue to assess software spending habits.
- Respondents reported that 28% of their software budgets are allocated to upgrades, migrations, and licensing changes they did not actively choose, a cost Origina terms the "software tax."
- Ninety-five percent of organizations paid for at least one vendor-driven change in the past three years that they believed would reduce performance or value, with the most recent instance averaging $12.87 million.
- The survey found that 91% of firms retired working hardware early to meet software deadlines, sacrificing an average of 1.65 years of useful life, while 84% diverted experienced engineers from core projects.
- Critics note potential bias since Origina sells independent maintenance, yet 76% of respondents cited low negotiation leverage and 80% said moving away from vendors is difficult.
Enterprises are spending nearly a third of their software budgets on upgrades they did not request, according to a new survey highlighting the financial burden of vendor-driven changes. The study, conducted by Censuswide for software support provider Origina, surveyed 2,018 senior IT decision-makers at large US and UK companies. Respondents indicated that 28% of their software budgets go toward migrations, licensing changes, and upgrades that they would not have chosen independently.
The financial impact is substantial. The most recent vendor-driven change cost the average organization $12.87 million. Despite these costs, 95% of respondents said they had paid for at least one change in the past three years that they believed would reduce performance, reliability, or business value. Fifty-three percent reported experiencing this more than once. Origina labels this phenomenon the "software tax," noting that it often degrades IT systems rather than improving them.
The costs extend beyond software licenses. Ninety-one percent of organizations retired working hardware early to meet software support deadlines, sacrificing an estimated 1.65 years of remaining useful life. Additionally, 84% of firms reported diverting experienced engineers from other projects to handle these mandatory upgrades. While Origina suggests independent maintenance as a solution, critics note the potential bias, as 76% of respondents cited low negotiation leverage and 80% found it difficult to move away from existing vendors.
Sources
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